After Property Tax Reform, Chaos Still Rules for Many

May 11, 2009

For release May 13 and thereafter (684 words)

If we can explore space, bank on-line and use lasers to remove gallbladders, you’d sure think we could get property tax bills out on time. Yet once again, Marion County residents — and folks in many other Indiana counties — are waiting for tax bills. This fiscal year, only two counties achieved “on-time property tax billing.”

The situation is much improved from last year, according to the Indiana Department of Local Government Finance. Forty-one counties have received state approval of final rates and budget orders, compared with only 13 at this time last year. In other words, the bills are or will soon be “in the mail.”

But a few are so far behind that it will be 2010 before taxpayers catch up to the appropriate billing cycle. Marion County is an example. The bills taxpayers will receive in late May or early June are actually last November’s and reflect the second half of the “2007pay2008” cycle. We should be paying the first installment of the “2008pay2009” cycle.

Confused? Join the club.

“Government is behind. Not the taxpayer,” explains the Marion County Treasurer, Michael Rodman, who’s the point man on the issue because he’s the one who drops the bills in the mail.

Rodman is hopeful that semiannual due dates of May 10 and Nov. 10 will resume starting next fall, “God willing and the creek don’t rise.” But there’s a hitch: Taxpayers will get an extra bill in February of next year to bring all payments up to date.

Rodman is on the front line of taxpayer ire, but it’s not fair to fault him for the mess. The situation is the result of a combination of events, mistakes and changes in law that created a perfect storm of tax confusion. Says Rodman, “A couple weeks here and a couple weeks there and you’re really late.”

It began in June 2007 when Indianapolis taxpayers revolted over sharp increases in assessed valuation that caused bills to soar from 30 to 300 percent or higher. After a review showed wide disparities in property valuation, Gov. Mitch Daniels ordered a new assessment of commercial and residential property. In the meantime, he froze taxpayer bills at 2006 levels. The “re-reassessment” put the county about six months behind schedule. Later that summer, Daniels ordered reassessments in Delaware, Gibson and Posey counties as well.

In 2008, the legislature transferred authority for assessment in most counties from township assessors to the county assessor’s office. In Marion County this meant the work previously overseen by nine township officials, who chronically missed deadlines, would be done by the Marion County Assessor, Greg Bowes, as of Jan. 1. While this streamlining will make assessment more uniform and efficient in the long run, the transition further slowed down the process. Bowes says he’s optimistic the next round of assessments will go smoothly.

Complicating the transition was the changeover from a 1970s data and billing system to more modern software. The bills coming out of Rodman’s office in June will be the first generated using the new program.

All of these delays end up costing taxpayers. Why? “Units of government are borrowing money because I haven’t been able to send a bill out,” Rodman says. That debt is paid by – you guessed it – property taxpayers.

The final irony is that the delays in billing cycles also delay the tax relief enacted by the 2008 legislature. Property taxes were to be capped at 1.5 percent of assessed valuation for “property taxes first due and payable in 2009,” with a one percent cap taking effect in 2010. Theoretically the bills we’re about to receive should reflect the 1.5 percent limit, but they won’t. Remember, we’re still in the “2007pay2008” cycle.

Throughout the state, other counties have similar explanations for delays. Is it any wonder taxpayers are distrustful of their bills? While no one person or government officer deserves blame, a whole lots of folks — from township assessors to the Statehouse — have failed us. If there’s one thing local government ought to be able to do competently, it’s assess, levy and collect our taxes.

Andrea Neal is a teacher at St. Richard’s School in Indianapolis and adjunct scholar with the Indiana Policy Review Foundation. Contact her at aneal@inpolicy.org.

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